This can add a sizeable amount to your monthly mortgage payments, so consider this extra cost when deciding on how much to charge for rent.

This rate increase will set your mortgage to align with buy-to-let mortgage rates. If you are not fixed into a deal with your mortgage provider at this stage you can shop around to find a better rate before renting your property.

Rental mortgage charges

You will have the option of paying this fee up front as a one-off fee via direct debit or you can add the amount to your mortgage.

If you add the letting application fee to your mortgage you will be paying interest on this amount for the term of your mortgage.

Landlord insurance

Whether you have a mortgage or not, it is important to amend the type of insurance you hold on your property. This is especially important for 2 reasons:

1.

Home buildings and contents insurance on your property or possessions will not be covered in a rented property, therefore you could become severely out of pocket if you need to claim.

2.

Landlord insurance is the only insurance that will cover your rented property and tenants if renting your property out.

Finding boiler cover

As a landlord you are responsible for servicing your properties boiler every 12 months. Failure to do so could result in the deterioration of the boiler and the expense of replacing or repairing it.

You can find ways to reduce this cost by comparing and taking out landlord boiler cover.

Not dealing with tenants deposits correctly

When you receive your tenants' deposits you must move the funds into a tenant deposit protection (TDP) scheme. If you fail to do this immediately and are caught, you will have to do one of the following:

Repay the money

Pay it into a tenancy deposit protection scheme within 14 days

Failing to follow one of these two options may lead to you being taking to court by your tenants, where you could be ordered to pay up to 3 times the deposit amount back within 14 days.

For more information on the Tenant Deposit Scheme visit the GOV.UK website.

Conducting repairs

If you provide an unacceptable quality of repairs or don't attempt to do any repairs in your rented property, your tenants can claim against you in the small claims court for repairs under £5,000.

If you want to avoid this happening you may want to consider hiring professional tradesman to conduct any repairs in your rented property.

This will ensure that the work is done quickly and efficiently and without defect.

If you have to provide major repairs on the property but have existing tenants in your property, you may be liable to pay for alternative accommodation should the work force the tenants to relocate temporarily. This cost should be covered under your landlord insurance.

If you failed to take out landlords insurance then you will need to find a way to afford to repair your property and pay for your tenants to live elsewhere until the work is completed.

For guidance on making household repairs as a landlord you can visit the GOV.UK website.

Estate agent fees

If you use an estate agent to advertise your rented property they will charge you a set fee. They will also take a percentage of the rental income if you continue to use them to manage your property.

If you rely on an estate agent to rent your property, you will either need to:

Reduce the monthly income you receive from the rented property to compensate the cost of using the estate agent

Increase the tenants' rental amount to leave room for the estate agent fees and for you to make a profit

Did you know?

Almost every estate agent charges different amounts for their fees.

If you compare prices from several estate agents you will allow yourself the strongest chance of getting the best deal.

If you successfully negotiate with the estate agents you can potentially earn a little bit more income, but equally you could make less if the estate agent decides they want a bigger percentage to pay for the exposure they will provide your property.

Finding a way to avoid unexpected landlord expenses can save you a small fortune, so prepare yourself as best you can and expect to have a successful venture as a landlord.

Our website is completely free for you to use but we may receive a commission from some of the companies we link to on the site. How money.co.uk works.

money.co.uk is a trading name of Dot Zinc Limited, registered in England (4093922) and authorised and regulated by the Financial Conduct Authority (415689). Our registered address is: The Cooperage, 5 Copper Row, London, England, SE1 2LH. We are classed as a credit broker for consumer credit, not a lender.